Minnesota

****rn801 Park AvenuernMinneapolis, MN 55404rnToll-Free: 1-888-339-5863rnPhone 612-339-5863rnFax 612-339-1529 rn****rnrnMahoney, Dougherty and Mahoney, P.A.rn801 Park AvenuernMinneapolis, MN 55404rnToll-Free: 1-888-339-5863rnPhone 612-339-5863rnFax 612-339-1529rnrn rnBusiness and Commercial LawrnMinnesota Business Law FirmrnServing Businesses throughout Minnesota, North Dakota, and WisconsinrnrnThe Minnesota business law firm of Mahoney, Dougherty and Mahoney, P.A. carries an 80-year history of successful litigation and appellate work to its current practice. Having handled thousands of cases, our lawyers have the experience to assist businesses with any litigation or non-litigation matter, including:rnrn *rn Contract Matters, including contract disputes, breach of contract issues, contract review, contract drafting,rn *rn Employment Law, including harassment, termination and discrimination matters on behalf of employers rn *rn Workers' Compensation Defense rn *rn Advertising Liability rn *rn Intellectual Property, including issues of trademarks, copyrights, patents, trade secrets, and more rn *rn Organization, including incorporation and the establishment of partnerships and limited liability companies (LLCs)rn *rn Business / Commercial Law, including transactions, buy / sell agreements, commercial real estate, and morern *rn Mechanics LiensrnrnThe Minnesota business law attorneys of Mahoney, Dougherty and Mahoney, P.A. have achieved many landmark decisions since opening the firmÂ’s doors in 1922. We known how to find the most cost-effective resolutions to commercial and business disputes, and have the resources and knowledge to either mount a vigorous defense in any court or negotiate a discreet, beneficial out-of-court settlement.rnrnWe place great value in our long-standing close relationships with clients. By providing skilled, cost-effective service, business clients regard us not only as their lawyers, but as their friends, confidantes and advisors. Our attorneys diligently keep our clients informed of case developments and take no major action with our clientsÂ’ consent.rnContact Our LawyersrnrnPlease contact our Minneapolis / St. Paul-based attorneys for more information about our Minnesota business law practice. Our lawyers serve clients throughout Minnesota and the Upper Midwest, including the Twin Cities, Rochester, St. Cloud, Duluth, Mankato, North Dakota, and Wisconsin.rnrnA Tradition of Service and Client SatisfactionrnMahoney, Dougherty and Mahoney, P.A.rn****

Minneapolis 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402-3901 Phone: 612-766-7000 Toll-Free: 800-328-4393 Fax: 612-766-1600 **** Corporate, Finance and Securities Faegre & Benson is the largest law firm in Minnesota and one of the largest firms in the Rocky Mountain region. The firm offers one of the most sophisticated corporate legal teams in the country. More than 100 corporate finance attorneys handle complex finance, securities and merger and acquisition transactions for emerging and established regional, national and international companies. The firm offers among the largest and most experienced corporate finance teams in both the Minnesota and Colorado regions and highly regarded corporate experience in London, Frankfurt, Shanghai, and Iowa. The publication Corporate Legal Times (Oct. 2004) ranked our firm among the top 10 in their listing of Top 25 Legal Counsel for M&A for 1st Quarter 2004, with deals valued at $17 billion, the highest ranked non-New York City firm on the list. Our Corporate Practice Areas Include: Public Companies Mergers and Acquisitions Private Companies Emerging Companies The AIM Market of the London Stock Exchange Venture Capital and Private Equity Institutional Debt Placements and Mezzanine Finance Broker-Dealers, Investment Banking and Capital Markets Public Finance Investment Management International Recent Highlights: Faegre & Benson served as lead counsel in a string of high-profile, high-dollar M&A transactions in 2004 and 2005: * Merger of Entegris, Inc. and Mykrolis Corporation ($1 billion) * IPO of Crocs, Inc. ($239 million) * Sale of Retek Inc. in a bidding war that resulted in a $670 million sale to Oracle Corporation, following an original agreement to sell to Germany-based SAP for $495 million * Sale of Marshall Field’s division of Target Corporation to The May Department Stores Company ($3.2 billion) * Sale of Mervyn’s division of Target Corporation to Sun Capital Partners and others ($1.7 billion) * Sale of International Multifoods Corporation to the J. M. Smucker Company ($840 million) * Sale of St. Paul Companies to Travelers (Minnesota Counsel) ($17.9 billion) * IPO of Life Time Fitness ($210 million) * IPO of Gander Mountain Company ($105 million) Our Reputation Our team is nationally recognized for providing efficient, high quality client service. We are as well known for our problem-solving counsel as for our deal-making, and our long-term clients look to us as trusted partners who are intimately involved in helping their businesses succeed. We have been a pioneer in the use of technology to provide more effective and efficient management of litigation and transactions. We have invested substantial firm resources (human and financial) in putting the best technology for communications and case management into the hands of our lawyers. Through our award-winning website, Faegre.com, our bi-monthly magazine, Trends, and our regularly scheduled seminars, we keep our clients abreast of current developments that affect their businesses. At Faegre & Benson, we believe value derives from two core characteristics of our firm: our commitment to client relationships and our efficient, responsive service. Our reputation for service, quality and value stems from the people who know the firm best – our clients. * Ranked among the top 10 law firms in overall technology by AmLaw Tech magazine in 2004 * Listed as preferred counsel by more members of the Fortune 250 than any Minnesota or Colorado firm (Corporate Counsel, 2003 and 2004) Our Clients We represent a wide variety of clients ranging from individual entrepreneurs and emerging companies to multinational Fortune 500 companies. Our clients’ businesses range from traditional manufacturing to rapidly developing advanced technologies. These businesses involve computer, e-commerce and internet products, food product distribution, agribusiness, telecommunications, outdoor industry, packaging, pharmaceuticals, medical technology and biotechnology, publishing, and clothing. We serve a diverse group of financial institutions including venture capital firms, investment banks, broker-dealers, mutual funds, commercial banks, investment advisers, and sponsors of pooled investment vehicles. Our corporate clients also include a variety of other businesses and institutions that are engaged in restaurants, retail merchandising and department stores, professional sports, entertainment, media, and education. In recent years our corporate group has handled many of the largest deals in the Midwest and Rocky Mountain regions, including M&A transactions valued at many billions of dollars for companies like Guidant, American Express, Target, Land O'Lakes, Archer-Daniels-Midland, International Multifoods, Piper Jaffray, ReliaStar, Chiquita Brands International, Fingerhut, Funco, and many others. We've also handled dozens of public offerings and private placements worth many billions of dollars, including IPOs for companies like Buca, Life Time Fitness, and Gander Mountain. Representative Clients: * Target Corporation * Cargill * Wells Fargo * General Mills * Archer-Daniels-Midland Company * Norwest Equity Partners * E I du Pont de Nemours & Co. * Frontier Airlines * Guidant Corporation * Land O’Lakes * American Express * Piper Jaffray ****

St. Paul (Main) - 651-641-0741 Baker Court Building 821 Raymond Ave., Suite 220 St. Paul, MN 55114 Business Succession Planning Business succession planning answers the question: What happens to the business when you’re no longer running it? Who’s going to manage the business when you no longer work the business? How will ownership be transferred? Will your business even carry on or will you sell it? If you have a family businesses, you will likely need to address these issues, and orchestrate a smooth transition of your business at your death or retirement. With family businesses, succession planning can be especially complicated because of the relationships and emotions involved - and because it is often difficult to convince the business owner to discuss transition and transfer issues. It is estimated that between 50% and 70% of family-owned businesses do not survive the transition from founder to second generation. Estate tax plays a role in these losses, but failing to plan for the succession of the business plays an equally important role. Saving estate taxes is usually the after effect of planning for other goals, those being primarily a happy and comfortable retirement and a successful transition of the business to co-owners, family, or key employees in order to support the retirement. Here’s an overview of succession techniques to help you get started. Give the Business Away Giving your family business outright to your children is the simplest way to transfer it. You can do this either during your life or at your death. Besides simplicity, the advan­tages include: * Straightforwardness, * Avoiding third-party involvement, * Paying any gift tax sooner rather than the generally higher estate tax later when the business may have appreciated in value, and * Removing the dollars used to pay any gift tax from your estate. But the outright gift of the entire business can be unfavorable because: * Distributing your assets fairly is difficult if all your children are not involved in the business and it makes up a dispropor­tionate share of your estate, * The transfer provides few liquid assets to pay the gift tax, all of which is imme­diately due, * You lose control of the business if you transfer all of it to your children, and * The transfer leaves little opportunity for discounting or freezing techniques. Sell to Family In an intrafamily sale, you can sell the busi­ness to participating family members. Here are some advantages: * The assets are frozen at fair market value on the sale date, removing future appreciation from your estate, * Neither the transfer nor the postsale appreciation will trigger any gift or estate tax, assuming the business was properly valued, * Your total tax burden may be signifi­cantly lower even though you pay income tax on the sale, because federal income tax rates are generally lower than federal estate tax rates, and * The tax savings will be even larger if the sale qualifies for long-term capital gain treatment. The disadvantages of an intrafamily sale include: * Family members may not have the cash to buy the business, and * The alternative of an installment sale may result in some children owing money to siblings, possibly causing future trouble. Use SCINs With self-canceling installment notes (SCINs), you sell your business for full and adequate consideration in exchange for an installment note, on the con­dition that the right to receive payments ter­minates on your death. The sale price is based on fair market value, taking into account a premium for the possibility that you will not receive the entire expected payment stream. Here are some advantages of SCINs: * The capital gains tax you pay will fur­ther reduce your taxable estate, and * With careful planning, the transaction will have no gift tax consequences and will exclude the transferred property from your estate and any future appre­ciation, as well as the unpaid principal balance due on the promissory notes that would result if you die before the notes are paid. The disadvantages of this method include: * The transaction will not qualify if you are facing imminent death, and * A reverse freeze can occur if you survive the term and you get back the property’s fair market value plus the premium. Sell to a Grantor Trust In a grantor trust sale, you establish an irrevocable trust and sell the business to it inexchange for a note. Here are some of the advantages of this method: * The trust is excluded from your estate for estate tax purposes even though it is a grantor trust for income tax purposes, * You recognize no gain or loss because the sale is disregarded for income tax pur­poses as a sale by you to yourself, and * The trust pays the note, with interest. While the payment goes back into your estate, the appreciation goes to the bene­ficiaries — such as your children — and is excluded from your estate. The disadvantages of a grantor trust include: * Careful planning is warranted because this technique involves some risks, * Improper valuation may result in unin­tended gifts, and * Under some circumstances, the IRS may reject the transaction as a sham and rule that the property remains in your taxable estate. Now Is the Time To Start As you can see, these various methods all have pros and cons. Each provides different income tax and gift and estate tax benefits. None can be evaluated in a vacuum. But one consideration overrides all else: Your need to develop a plan for the protection and transfer of what might be your most valuable asset — your business. Please call us for further information and help in planning your best course of action.